MIXED OLIGOPOLY, PRIVATIZATION, AND STRATEGIC TRADE-POLICY

This paper investigates the effects of privatization in the presence o f strategic trade policies within an international mixed oligopoly ser ving a single market. If the government uses a domestic production sub sidy, then welfare is always increased with privatization, while the o ptimal subsidy falls. If the government uses an import tariff, privati zation increases welfare over much of the parameter space. The optimal tariff, however, may rise or fall.